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Thursday, November 10, 2016

MTNL soon to offer VRS to employees: Report

STATE-run telecom major Mahanagar Telephone Nigam Ltd (MTNL) employees may soon get a voluntary retirement scheme (VRS) offer of Rs 1000 crore, following an nod from the Telecom Commission, the highest policymaking body of the department of telecommunications (DoT), in April this year.
The ministry of communications will seek the Cabinet's approval on the same, in order to cut down high staff cost, says... a media report. The ministry is also trying to get it approved before the upcoming Union budget so that the funds can be budgeted. It is estimated that about 5,000 employees of MTNL will take VRS, which is about 18 per cent of total employee base.
The VRS, once implemented, could save Rs.400-500 crore every year for MTNL and free up certain resources for making more investments in the network.
MTNL plans to invest Rs 2500 crore over next two-three years to expand and upgrade its network as it has been struggling hard to survive in the highly competitive market.
A senior official from the ministry was quoted as saying, “We will soon send a note to the Cabinet for approval of MTNL’s VRS plan. The Telecom Commission recommended it in April this year, but there has been no movement since then. It’s a part of the revival plan for the telecom PSU and the first stage is Cabinet approval.”
“Stagnant revenues and a high employee structure are the biggest problem areas for MTNL. Telecom is a sector which needs constant investment for modernisation. But, on the contrary capital expenditure in MTNL is quite less. There are also assets which need to be monetised,” the official added.
MTNL in June quarter posted a loss of Rs.718.02 crore where its total income decreased by 4.5 percent to Rs.744.72 crore. The telco offers services in Mumbai and Delhi.
Earlier, the government has ruled out the disinvestment plan for MTNL. After massive protests by employees' union of MTNL, NITI Aayog clarified that as of now there is no proposal of strategic sale or closure of the government-run telecom firm.
It may be mentioned here that MTNL, which offers services in Delhi and Mumbai, has been without a full-time CMD since May 30, 2014, when AK Garg retired from the post. However, PK Purwar, director (finance) of MTNL was given additional charge for the post from June 2014. From June 2015 to June 2016, NK Yadav, who is member (services), held the charge. Purwar was again given the additional charge in June 2016, after completion of Yadav's tenure.